TX HB3287

Funds reserved by property owners under Section 53.101 are considered trust funds only when beneficiaries have perfected a mechanic's or materialman's lien claim AND the property is subject to a senior lien in favor of a lender

Reserved funds do not become trust funds until a lender disburses those funds to the owner when construction is financed through a loan secured by a lien on the property

Funds released in good faith by an owner to a contractor or subcontractor before the end of the required reservation period are not considered trust funds

Failure to reserve required funds for residential construction projects (single-family houses, duplexes, triplexes, or quadruplexes) does not constitute misapplication of trust funds

Trustees are only liable for damages to beneficiaries for misapplication of trust funds if the misapplication was done with intent to defraud, and courts must award costs and reasonable attorney's fees to prevailing parties in actions under this chapter